How to Combat
“Showrooming”
If mobile technology literally puts the
newest retail revolution in the hands of
the consumer, what’s a specialty retailer
to do?
Take “showrooming,” for example, a
term that was on many minds at the
International Home + Housewares Show
(IH+HS) in the wake of a report from
The NPD Group.
Showrooming refers to when consumers
visit a brick-and-mortar store to test out
a product, perhaps have a salesperson
explain the features and demonstrate its
use, but then leave the store and buy it
online – in effect, treating the store like
a showroom.
Specialty stores, which pride themselves
on personal service and go out of their
way to offer product demos, find themselves at a particular disadvantage. The
very features they employ to differentiate
themselves from department and big box
stores leave them as prime targets for
this practice.
The NPD Group reported that a “modest”
number ( 15 to 20 percent) of consumers
engage in showrooming. In small electrics,
7 percent.
While the study highlighted that we are
a long way off from a world of online-only
shopping, according to a statement from
Perry James, NPD’s president of home
screen. The merchant has their own phone that scans the screen. “It creates a nice seamless expe- rience,” Kirsner says, and offers retailers an easy way to create loyalty and rewards programs. The main investment a retailer typically makes for mobile pay- ment is the wireless bill for the phone used to scan consumers’ payment information. Companies like PayPal and Intuit are doing mobile payment, which typically sends the consumer a digital copy of the receipt.
Perhaps the most significant – and
threatening to independent retailers – is the third area: the ability
for consumers to scan bar codes,
and do price comparisons through
apps from Google and Amazon.
The release of Amazon’s price-scanning app in particular caused
a furor because it also offered a
discount to shoppers, Kirsner says.
“It basically said, ‘Go look at this
expensive coffee machine in the
store but then you can go home
and buy it online for less.’”
A survey of 1,027 smartphone
users, conducted in February by
Zoomerang, an online survey
services provider, and sponsored
by Boston-based in-store mobile
commerce provider AisleBuyer,
found that 64 percent of smart-
phone users are interested in
scanning products in a store with
their smartphone to get additional
information, such as pricing,
product reviews, nutritional
information and accessories.
The survey found that 36
percent of shoppers have
already used their smartphone
to scan a product’s bar code in
a store. Younger people 18 to
34 years old were more likely
to have scanned bar codes
than older people.
Kirsner says he “feels the pain” of
independent retailers, who he says
want as few consumers as possible
to know about price-scanning apps
because they fear the impact on
their livelihood. He says he understands that. “I worry that in the
future stores will be limited to day
spas, banks and dry cleaners.” In
other words, businesses the Internet can’t replace.
But the answer, he feels, isn’t for
retailers to forbid consumers from
using their smartphones in stores
(which, Kirsner says, at least one
retailer has tried). He says it makes
sense [for retailers] to look at mobile technology for its benefits and
get involved with businesses like
PayPal and Groupon to boost their
traffic. (For other suggestions on
how gourmet retailers can confront
the negative implications of price
scanning, see sidebar.)
So, what do gourmet retailers
make of the mobile technology
revolution? What are they seeing
now in their stores? In polite terms,
the response is: Yawn.
For Jennifer Baron, owner of A
Cook’s Companion in Brooklyn,
N.Y., it is rare to see a consumer
shopping with a smartphone in
hand. “I think older customers
would think it rude to do that in a
store, in front of sales associates.
Also, we are in a very old building
and reception is quite poor or nonexistent, so most phones do not
work on the floor.”
While she says she would never
disturb a smartphone user thumbing away to ask what they are up
to, she adds, “If they look sheepish,
they are usually comparing prices.
Frequently, they are checking that
it is the same product they have
already researched. Usually, the
price checking only happens with
electrics and high-end cookware.”
